The Perks of Unifying Payroll & Compliance Management
The HR world is at a watershed moment. The gig economy is growing, four monumental labour laws are about to come into effect, and the hybrid workforce seems to be here to stay. But it isn’t just business processes that are changing. The employer-employee relationship is transforming too.
Employers and HR must now focus on the quality of work rather than mere task management. They need to cater to their team’s expectations and create a stable ecosystem of professional growth. Organizations that do so are more likely to retain precious talent and continue growing than those that don’t.
But to focus on team building, employee welfare, and business goals, HR personnel need to break free from daily administrivia. And, the best place to begin is with the centralisation of payroll and compliance management.
The Need for Centralisation is Multi-Layered
Organizations spend millions on their payroll and compliance management. However, the processes are often managed by different partners, which exposes the company to a smorgasbord of compliance errors and penalties. Payslips, which should be delivered a day after salary credit (as per the Minimum WagesAct, 1947), get delayed. Cases of pay miscalculation and non-compliance to labour laws
also become common when a company has multiple HRO partners. These lapses need to be avoided at all costs, especially in the present work environment.
Other disadvantages of a decentralised HR process include:
Lengthy Approval Processes:
Delayed decision making creates a ripple effect through the organisation, increasing the turnaround time of multiple departments.
Ad Hoc Report Generation:
Inconsistent reporting practices across the organisation lead to mismanagement of resources and a lack of accurate insight.
Non-Standardised Management of Freelancers:
Existing payroll platforms rarely account for freelancers. With the gig economy growing, this will need to change
The New Labour Laws Diktat Unification
A central theme of the recent labour norms is a consolidation of HR processes, through centralization and digitization. It subsumes 44 existing laws, and lays down clear instructions for employers to reduce compliance discrepancies.
Important instructions to employers, per the new laws:
Digitize Business Records:
Business operations, reports, and all data collected must have an online portal.
Become Ready for Web-based Inspections:
The inspection of operations will occur online with digitally generated reports.
Maintain a Standard Payroll Structure:
From C-suite and regular employees to freelancers, payroll processing must be
standardised at every level.
Non-compliance and delay in implementing these changes will incur strict penalties. Imprisonment and fines up to 1 lakh can be imposed on employers.
Unify and Conquer
To navigate the upcoming changes, companies will need to unify their payroll and compliance management efforts under a single banner. This will reduce the errors that hamper productivity and increase compliance.
Operational Advantages of a Centralized HRO
Fast & Flawless Payroll Processing
Companies that perform only payroll activities often miss key compliance checks. This makes non-compliance in pay structure a big challenge when different partners handle payroll and compliance processes.
Activities are completed on different timelines and coordination is often poor. Having a single partner ensures that payments are properly structured to the latest norms without errors.
Employee Management Turns Low-Touch
With everything under the same roof, there is zero miscommunication between the payroll and compliance departments. For HR, this eliminates gaps in employee lifecycle management and makes the activity super low-touch.
Adhering to Compliance Calendars Becomes Effortless
With a single partner handling compliance, adhering to regulatory updates and compliance calendars becomes easier for HR. It also standardises the implementation process and ensures a smooth transition.
Greater Data Security
Having one HR partner means lower exposure of data. It also reduces the risks of data theft and misuse. In case of any discrepancies, companies also have the option to address the issue swiftly, before serious damage is caused.
Increases Brand Power
The efficient organizational structure that a centralized HR process brings contributes positively to employee retention. Transparency in operations and the reduction in legal penalties also increases the organisation’s reputation and credibility.
Centralization is Also Best for Business
In the new normal, traditional HR best practices are fast becoming outdated. Therefore, HR managers will need to focus on the big picture and build employee loyalty. Walmart with 2.3 million employees on their payroll achieved a profit of $ 559 billion by revamping and centralising their HR processes. Every company needs to follow suit.
To centralise and upgraded to a unified payroll system, reach out to us.